Financial Management and Auditors report

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Financial Management

  1. (7 points) Against the odds, you won the New York
    State Lottery. The jackpot was advertised as $40 million. As the winner, you
    are entitled to payments of $2 million at the beginning of each year for 20
    years ($2 million x 20 years = $40 million).

    1. If you know that you can earn 5% on your savings per
      year, how much is the lottery prize worth to you?

    1. They
      offer you $25 million to take the prize now. Do you take the $25 million one-time
      payout?

      NC
      PERFORMING ARTS CENTER FINANCIAL STATEMENTS

      ANSWER ALL
      QUESTIONS

Using the provided NORTH CAROLINA PERFORMING ARTS CENTER AT CHARLOTTE
FOUNDATION (referred to as NCPAC) Financial Statements for the Years Ended August
31, 2014 and June 30, 2013 answer the following questions:

  1. (4 points) Who
    performed the audit? What was their opinion? What does this type of opinion
    mean?

  2. (2 points) For
    which revenue or support line item, would a 10% decline create the greatest
    financial problem for NCPAC? Why?

  3. (3 points)
    Calculate the ratio of program expenses to total expenses for 2014 and 2013.  Does this seem reasonable?

  4. (1 point) In
    2014 NCPAC shows a substantial increase in operating revenue. Does this nearly
    20% increase in revenue and support translate into substantially better
    financial results? Why?

  5. (10 points) Create a table of common sized
    assets and liabilities for the statement of financial position.

  6. (14 points) Calculate
    the following ratios: current, quick, days of cash on hand, receivables
    turnover, average collection period, fixed asset turnover, total asset
    turnover, debt, debt to equity, times-interest earned, operating margin, total
    margin, ROA, RONA

  7. (3 points) Is
    there anything that you see in the other portions of the financial statements
    (Notes, Statement of Cash Flows, etc.) that may be of concern?

  8. (8 points) Write a memo that reflects your
    evaluation of the financial status of NCPAC. 
    In the conclusion, please provide a recommendation to management on the
    next steps.

mmc_solution.xls
2014_auditors_report_final_120414.pdf
financial_managment_question.doc